Cannabis Banking Resources

Arcview Market Research and BDS Analytics predict the legal cannabis sector to hit an estimated $57 billion in spending by the year 2027. Grandview Research predicts the legal cannabis industry to be worth an estimated $146.4 billion globally by the end of 2025. With the United States of America removing hemp from the Controlled Substance Act, cannabis is set to see exponential growth in 2019.

According to an article published in Forbes by contributing author Tom Angell;

“The number of depository institutions that are actively banking with the cannabis industry has increased roughly 18% since the beginning of 2017.”

Banks are getting tired of missing out on the billions of dollars the cannabis industry is generating while politicians play the more research needed card.

By the start of November 2018, the number of financial service providers banking with marijuana businesses was around 400 per a report by the Financial Crimes Enforcement Network or FinCEN for short. The trend of financial institutions working with cannabis businesses is not new. In the state of Massachusetts, a study was conducted by a research group called MRB Monitor during 2015 and 2016.

According to this research, it was estimated that 34% of the businesses in Massachusetts operating as medical marijuana dispensaries possessed bank accounts with a reputable financial institution such as Wells Fargo, JPMorgan Chase, Bank of America, and Citigroup. Many cannabis dispensaries had multiple bank accounts.

A Grey Area Despite State Laws

Banking and cannabis have been a very gray area. Although states across America like Colorado, Washington State, Oregon, California, Nevada, and others have legalized adult use recreational cannabis and 33 states have legalized some form of medical cannabis the plant still remains against the law on a federal level.

This puts banks and financial institutions who work with cannabis businesses in a curious position. They could lose their federal insurance as well as be subject to raids and financial asset seizures. Green Market Report covered a story where the state of Colorado’s credit unions was suing to be allowed to set up a master account.

Proceed with Caution

While the number of banks that are working with cannabis businesses is starting to increase there is still much skepticism when it comes to working with cannabis businesses for many banks. A spokesperson for the United Cannabis Business Association by the name of Harvey Englander explained this financial cannabis conundrum the best when replying to a question he was asked via email.

Harvey said;

“Your question provides me with a conundrum because if I identify some banks, they may close the accounts. So, I must decline to respond.”

Discretion is Still Key Even When Legal and in Compliance

Apparently, discretion is the key for cannabis businesses looking to bank with financial institutions like other normal taxed businesses.

Reports are unclear but suggest that smaller banks and credit unions are the ones working with cannabis businesses. Their services are not advertised so you might say they’re kept a little hush hush. FinCEN released a set of guidances that “should help enhance the availability of financial services for, and the financial transparency of, marijuana-related businesses.”

The FinCEN Guidelines

Under the guidance’s issued by FinCEN, financial institutions looking to theoretically avoid federal prosecution could do so by adhering to the guidelines set forth by FinCEN. To some these guidelines mean the collection of what should be private data. This data could lead to frozen accounts, asset forfeitures, and other legal repercussions.

These guidelines included creating and filing SAR or suspicious activity reports on all marijuana company related financial transactions. This means the federal government would collect information on these companies and their financial history.

It seems if the feds wanted to do this without being so deceptively secret about it or threatening to financial institutions, they could just go to the IRS. After all the IRS collects loads of cash every tax season from cannabis businesses across America. But the Feds like to do what they do best, and that is to make things a mess.

A New Light Shines Rays of Optimism for Cannabis Banking

The draconian days of the U.S. Federal Governments marijuana prohibition are coming to an end. All of these numbers could not have figured in the hemp side of the legal cannabis industry. With U.S. President Donald Trump signing the 2018 Farm Bill Hemp (a form of cannabis) was officially removed from the Controlled Substance Act paving the way for banks to work with a whole new generation of cannabis companies.

MJBizDaily did some incredible research so that you don’t have to. Below you will find a list of financial institutions and services that are working with the cannabis sector. You can visit their website to look at a state by state list of the services offered to cannabis businesses as well. With hemp being removed from the Controlled Substance Act, chances are this list will grow like a weed in the coming months.

This is Just the Beginning

2019 is going to be an exciting year for cannabis. More states are looking to legalize the plant and end outdated laws. From tax dollars to an increase in jobs and stronger communities, cannabis is proving the negative anti-cannabis propaganda of Reefer Madness to be nothing but lies and we are ushering in a new greener era and future for all.

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